TheHeadCoach

www.DrDoug.com

2009-05-27T11:33:00.002-05:00

Visit me at www.DrDoug.com for my CNBC video blogs, posts and products.

Thanks,
DrDoug

Focus in the Face of Adversity

2007-04-30T09:20:00.000-05:00

Controlling Distractions and Just Playing the Game
by Doug Hirschhorn, Ph.D.

At the top levels of the trading world, hard-work and intelligence do not differentiate between successful and unsuccessful traders. I believe the same concept applies with elite athletes in any sport. Fact is there are an abundance of guys who can throw in the mid 90’s, but how not many can do it AND hit their spots consistently when the pressure is on. How many golfers, in a pressure situation on the 15th hole, can fly the green, end up buried in the back bunker, and then chip the ball within a foot of the pin on their next shot, saving par? I think you would agree that the answers to both questions are ‘not many.’ So then what really does differentiate the elite from the elite? If you ask me, I think it is their mental game.

For golf legends such as Jack Nicklaus and Arnold Palmer, focusing was a mental skill that moved them from winners to legendary. In reality, it was not that they possessed substantially greater raw talent than others but rather that they had greater FOCUS than most. Over the years, they have revealed their ‘secrets’ to others and while the concepts are simple enough, the consistent application of them is what seems to make the difference. The following are two things that can put you on the path towards Reaching Your Trading Potential: Controlling Distractions and Just Playing the Game.

Controlling Distractions
I know you all have heard this one before, but if you are not doing it on a consistent basis, then you certainly need to hear it again – and listen this time.

Anything and I mean ANYthing that pulls your attention away from what you are working on should be viewed as a distraction.

If it helps, you can think of distractions (no matter how small) as bungee cords holding you back from reaching your potential. You know they are there, you try to block them out, but eventually they reach maximum tension, stopping your forward momentum and sling-shotting you backwards.

I have found that the major mistake people make is they try to block out the distractions. Fact is distractions are always present so accept them as part of your reality. Once you stop fighting with them, you can choose to just IGNORE them. Did you hear what I said? “CHOOSE.” That’s right. As soon as you see a distraction as a choice you can make, it then changes the entire game from out of your control to INTO your control – and that is where the mental game lives. In other words, let distractions become background noise in your game. No need to waste time, energy, and resources on trying to eradicate them because if you refuse to view them as a threat to your focus then they cannot be.

In trading, perhaps the single greatest distraction to a trader’s performance is the money. While money is the final measure of success in a trading career, the way to achieve that success is actually by learning how to view trading as a game.

Focus in the Face of Adversity
Trust me, it is not magic and I have found that the best way to explain this powerful concept is to walk you through an example of how two traders can react to the same setback in totally different ways. The scenario is that the traders have been trading well for the past few days and then unexpectedly get run over by the market because of factors outside of their control. The economic result is that they end up giving back 50% of their profits in one trade.

Trader A
So much for being on fire. You gotta be kidding me! I knew I was due for loss. I can believe they did this to me. What a joke. This market stinks. It is totally impossible. Just when I get some momentum, they turn around and run me over. I will never get that money back.

Trader B
Wow, what just happened? Wait a minute. Take a step back. Focus. No point in getting angry. I need to stay in control. I am not happy about what the market just did but I refuse to compound the problem by getting emotional. I had edge in that trade. I followed my plan. It just did not work out. And there was no way I could possibly know the market would turn on a dime. As much as this hurts, it is also the reason why I love this game.

As you can see, Trader A became emotional, erratic and angry while Trader B remained mentally focused, objective and accepting. The cold reality is that this is trading and that means there is always uncertainty and risk. Unexpected set backs are going to happen from time to time. That is the nature of the game. No one is out to sabotage you it is just the cost of doing business. Sometimes you win, sometimes you lose and sometimes it just rains.

Playing the Game
Now, let’s be clear about what I am saying. When I say “game” I mean not getting caught up in the economics or severity of any given situation. The more FUN you can have, the greater your capacity will be to remain focused and objective.

Jack Nicklaus used to talk about golf as a game of ‘amused tolerance’ where one shot makes you feel like a pro while the next shot can make you feel like a hacker. As any elite trader will tell you, success and failure in trading comes down to your ability to stay balanced with your emotions. If you are able to see your world as a game then the highs will never be too high, the lows will never be too low, and you will always have fun experiencing it.

So now that you understand what it takes, you should be asking HOW do you do it. While there is a clear answer, there, unfortunately, are no short-cuts to achieving it. It really comes down to PRACTICE, PERSISTANCE and PATIENCE.
Practice the mental skills you know you need to work on
Be Persistent in working on them
Have Patience with yourself as you develop them

Perhaps the best way I can help you master this is to encourage you to apply this philosophy to a different activity and then have you transfer it to what you do as a trader. What I mean is the next time you play golf, tennis, basketball or any other sport, focus on Seeing it as a Game and work on balancing your competitive intensity with having FUN in engaging in the activity. Be aware of the highest highs and lowest lows by catching yourself from getting giddy when things are going well and boosting yourself out of disappointment when things are not going your way.

So what is a major factor in differentiating good traders from great and great ones from the elite? Well, as you have probably guessed by now, it is not raw talent. Sure some people have a head start because of how they are hard-wired but that does not mean they are destined for success and the rest of us for failure. Remember, few great traders are born that way. In reality, factors such as controlling distractions, focusing in the face of adversity and playing the game are critical to differentiating success from failure and that is why trading is the greatest occupation in the world. The best part about understanding that is anyone can learn how to master them because it is just a choice, and one that we each can make for ourselves.

Doug Hirschhorn, Ph.D.

learning from mistakes and moving on

2007-04-30T09:17:00.000-05:00

i want to start to share some of my real time coaching experiences with traders...hope you all find parts of it of value.

April 24, 2007

A client of mine asks me the following question ...

"When should a trader know when to say it is enough and I need to get out of the position. More importantly, how do you find a balance between learning from a mistake and not being weighed down by it on your next trading decision."

Here was my advice:

* if you have "edge" in a trade, then winning or losing on a trade will be determined long before you find out the outcome (profit/loss) on the trade.

* important to focus on the process of the trade... making ONLY high quality trades

* your job as a trader is not to determine or decide how much you make or lose...that is up to the market. Your job is to put on trades with "edge."

as far as not being weighed down by the mistakes, my suggestion is to begin a "lessons learned" spreadsheet where you document mistakes you make and the lesson you learned from it.

I also suggest you start a qualitative trading journal that way you can get the emotions out of your head and onto the paper.

this will help you move past your barriers and get some closure on them so you can be focused on the next trade.

Doug Hirschhorn

Trader Monthly Magazine...

2007-04-21T12:55:00.000-05:00

update:
I just finished writing my next article for Trader Monthly....wont be out for a few months - think @ Hockey Season...

but the article is a winner....as I delve into the notion of Trading for Revenge.

Doug

Journey to Greatness articles

2007-04-21T12:52:00.000-05:00

Hello all,
I am currently writing a series of articles for the University of Miami Alumni Association. The theme is "Journey to Greatness." The articles are not specific to trading...but the lessons are paralleled.

For those that are interested, here are teh links:
March 22, 2007 http://www6.miami.edu/atmiami/20070322.htm and
April 19, 2007 http://www6.miami.edu/atmiami/drdoug/edition2.htm

...Enjoy.

Doug

For More Information on Dr. Doug Hirschhorn

2007-03-06T12:00:00.000-05:00

It has been an exciting time in the markets - Fear, Panic, Success, Emotions and Ego.

Dr. Doug Hirschhorn, a regular contributor on CNBC, helps great traders deal with all of these so they can become even greater.

For more information on Dr. Doug Hirschhorn and his services, please visit his website at www.TradingDr.com or email him at info@TradingDr.com

Keep your eye on the ball and your head in the game!

Four Common Emotional Pitfalls Traders Face and How to Solve Them

2006-10-06T13:27:00.000-05:00

By Doug Hirschhorn, Ph.D.

Peak performance in trading is frequently hindered because of the emotions a trader feels and more importantly how their trading behaviors change based on those emotions. I have found that the following four emotional experiences have the greatest, direct impact on a traders ability to achieve higher levels of success.

1) Fear of Missing Out
2) Focusing on the Money and Not the Trade
3) Losing Objectivity in a Trade
4) Taking Risk Because you are Up (or down) Money

Fear of missing out occurs when a trader is more afraid of missing an opportunity than they are of losing money. As a result, traders tend to overtrade in a desperate effort to ensure that they do not miss out on money making situations. This over trading can then potentially trigger an under trading response if the traders experiences a “trading injury” such as a big loss, along the way. They way to solve this is first to accept the reality that you are always going to miss out on something, somewhere. The second step is to establish game plans on paper and be held accountable to executing those plans.

Focusing on the money and not the trade limits performance because the trader quantifies their success based on their profit and loss data. As a result, when he or she is up or down a certain amount of money that they view as significant, then they alter their trading behaviors regardless of what the actual, real trading opportunity is that is presented to them. The way to solve this is to quantify your success based on HOW you traded not HOW much you made on the trade. Did you have edge? Was it your pitch? Did you make a high quality trade?

Losing objectivity in a trade occurs because traders develop emotional ties to their previous entry levels. The trader is no longer making trading decisions based on the trade but rather based on how much they are up or down in the trade. The key to overcoming this is for the trader to continually ask him/herself, “Why am I in this trade?” and “If I was not in this trade right now, would I enter this trade long, short or do nothing?”

Taking bad risk because you are up or down money. People do not like to lose – especially money. Normal solid risk/reward thinking becomes skewed once a trader is up a large sum of money. They begin to experience something called “mental accounting” and they treat money differently based on how they made money or how quickly they earned it. On the flip side, when traders are down money, they tend to be consumed with trading for revenge and trying to make it back, oftentimes as quickly as they lost it. As a result, they may take “shots” or do the “screw it” trade because they feel helpless. To solve this destructive behavior, the trader should use their trading journal to document their emotional highs and lows and what triggered it so they can be in tune with when they are feeling over-confident or angry/frustrated. Once they recognize these emotions, they should immediately call a time out and step away from the computer or reduce the risk they are taking until they can bring themselves back to center court.

-- Dr. Doug

Copyright 2006, Doug Hirschhorn All Rights Reserved

www.TradingDr.com

TradingDr.com

WWW.TRADINGDR.COM is LIVE!!!

2006-07-24T14:28:00.000-05:00

Hello all,
I am excited to announce that my my website is live, up and running!

Click HERE:

At www.TradingDr.com, you will find:

• digital downloads you can purchase!
• dates and locations of my future speaking events
• peak performance articles
• information on how to sign up for my weekly focus groups
• schedules for my webinars
• sign-up forms for my morning motivator phone calls
• one-on-one coaching services
• and more!

Keep your eye on the ball and your head in the game!

Dr. Doug, The Trading Dr.
www.TradingDr.com

Available NOW for Purchase - Live Dr. Doug Presentations!

2006-07-17T07:13:00.000-05:00

Get your mental game in gear by listening to these high-impact psychology of trading workshops by Dr. Doug - The Trading Dr.

Focusing on the Trade and Not the Money
Dr. Doug, “The Head Coach,” introduces the idea of how traders should think in terms of probabilities and measure their success by the quality of their trades and not strictly based on their profits and losses. He talks about why traders do this, breaks down the basic differences between successful and unsuccessful traders and, most importantly, offers real solutions on how to overcome this destructive trading behavior.
· Purchase & Download at TradingDr.com

Overcoming Your Trading Fears
In this live presentation, Dr. Doug, “The Head Coach,” maps out the difference between Internal and External confidence. He clearly identifies the psychological impact each has on a trader’s mental attitude, how it impacts trading performance and, as always, Dr. Doug offers insights into how to establish long lasting confidence in any trading situation.
· Purchase and Download at TradingDr.com

*** These products are intended for individual sale. Reproduction in whole or part for re-sale, free distribution or sharing is a violation of intellectual property rights. Group licensing is available for purchase, please email with subject line GROUP LICENSING for more information.

Keep your eye on the ball and your head in the game!

- Dr. Doug, The Trading Dr.

Dr. Doug's Workshops in Las Vegas

2006-07-10T13:07:00.000-05:00

I am scheduled to conduct two workshops in Las Vegas in September.

September 8, 2006
Think Like a Trader, Trade Like a Trader

Strategic Trading Institute a Division of Global Futures & Forex, LTD

September 9, 2006
Mastering the Skills of Focusing and Concentration

The Forex Trading Expo

Click the above links to learn more about them. Hope to see you there.

Keep your eye on the ball and your head in the game!

Dr. Doug, The Trading Dr

Dr. Doug's Focus Group (Begins May 13, 2006)

2006-05-05T08:13:00.000-05:00

Dr. Doug’s Trader Focus Group will begin Saturday, May 13, 2006
This is your chance to get over 2 months of personalized, daily coaching from Dr. Doug “The Trading Dr.”

* 8 meetings total (1 per week)
* Daily email accountability from Dr. Doug (Journaling, High Quality Trade Worksheets, Lesson Learned Templates and more)
* Group size is limited to 6-12 people
* Cost: $4500 (for all 8 meetings and daily follow-ups with Dr. Doug)

Email: Dr. Doug "The Trading Dr." to obtain a full outline of the program and payment information.

Full payment must be received by Thursday, May 11th to participate in this Trader Focus Group.
All meetings will be held via Webinar/Phone – you will be responsible for any toll charges

Keep your eye on the ball and your head in the game!
Dr. Doug “The Trading Dr.”
www.TradingDr.com

WEBINAR... OVER TRADING/UNDER TRADING: REAL CASE STUDIES AND WINNING SOLUTIONS

2006-04-03T16:29:00.000-05:00

Dr. Doug “The Head Coach” presents: Office Hours with the Coach

If you have barriers in your trading, Dr. Doug - TheHeadCoach, has solutions.

This week’s topic:
Over Trading/Under Trading: Real Case Studies and Winning Solutions

When
Thursday, April 6, 2006

Start Time
4:30pm EST

This exclusive, content filled WEBINAR presentation will be followed by open Q & A with Dr. Doug “The Head Coach.” (you must have access to a telephone to listen/talk for the audio portion)

There are only 10 spots available for this exclusive event - which means you WILL get 1-1 time with the coach.

** Email Dr. Doug - TheHeadCoach to reserve your spot and get in the game! **

Price
$125 per person

Payment will be processed via Pay Pal.
Once payment is received, log-in information will be emailed directly to you.

Keep your eye on the ball and your head in the game!

- Dr. Doug - TheHeadCoach

Disclaimer
Dr. Doug’s expertise is in the Psychology of Trading and not on HOW or WHAT to trade. Dr. Doug does not make trading recommendations or provide trading advice. He is an expert on the mental game. Additionally, Dr. Doug has a Ph. D. in Psychology with a specialization in Sport Psychology. He is not a licensed psychologist and does not provide therapeutic, clinical or counseling services.

ELIMINATING BELIEFS AND BIASES

2006-03-24T16:43:00.000-05:00

By: Dr. Doug – The Head Coach
TheHeadCoach@gmail.com

Part of knowing how to extract money from the market is understanding the irrationality that oftentimes exists within the market. In Michael Lewis’ book Moneyball, John Henry (hedge fund manager and owner of the Boston Red Sox) is noted as saying, “People in both fields (baseball and trading) operate with beliefs and biases. To the extent you can eliminate both and replace them with data, you gain a clear advantage” (p. 90-91). This clear advantage is what we call ‘edge.’ Many times edge appears in the form of information while in other cases edge can simply be the realization that humans are prone to make irrational decisions when faced with uncertainty. These irrational decisions oftentimes appear in the contexts of social interaction, sampling bias, and anchoring.

Social Interaction
People are social by interacting with one another. Market pricing is created by people; therefore, pricing is influenced by social interaction. Most commonly we see this in the market through herding behavior; however, on an individual level, social interaction can have a dramatic influence on your opinion or level of conviction in a trade. Ever have a strong opinion on a trade, then someone with more experience or whose opinion you respect or who is on a ‘hot’ streak is not as bullish as you are on the position so you start to change your mind or question your conviction?

How to Solve: If you have the discipline to step back and eliminate the outside beliefs, then you can clearly evaluate what remains.

Sampling Bias
I agree, numbers do not lie…but they can be deceiving. When faced with uncertainty, people tend to look for easily accessible information as a basis to form their opinion. The most easily accessible information is either in their memory or right in front of them at that time. As we all have experienced, people tend to have selective memories - meaning remarkable events tend to stick in our memories and we use it as a foundation for forming opinions. For example: which is more likely to kill a person in the United States: a) a shark attack or b) a falling airplane part? Answer: airplane part is 30 times more likely. As far as information in front of us, if I wanted to find out who baseball fans like more, the Yankees or Red Sox the answer would probably be different if I asked people who live in NY (which is easily accessible for me) compared to driving to Boston (which is not easily accessible for me).

How to Solve: Be aware of where your sample is coming from and take that into account when forming your opinion so you do not make the mistake of believing that the findings from a small sample are always representative of a larger sample.

Anchoring
Anchoring occurs when a person is faced with an uncertain situation that they need to quantify.
During this uncertain period of time, people are easily influenced by outside (and sometimes irrelevant) data points which create a psychological “anchor” for them to base their future opinion. Traders experience this by anchoring to a stock price and then forming their opinion about how high or low that stock can go in the future, relative to that previous price. The flaw in this price quantification is that the past price was determined by past events while the future price will be determined by future (and oftentimes) unknown events. Ever heard the cliché previous performance is not an indication of future results?

How to Solve: Focus on remaining objective and embrace the notion that the market reflects perception before it reflects reality. Make decisions based on the idea that your goal is to make money instead of being right.

All in all, understanding when human opinion becomes irrational can create a lucrative window of opportunity for those who are paying attention.

Keep your eye on the ball and your head in the game!

Copyright 2006, Doug Hirschhorn, Ph.D. All Rights Reserved

HEAD COACH WORKSHOP IN NYC ON APRIL 9, 2006 - MASTERING THE SKILL OF MONEY MANAGEMENT

2006-03-21T09:50:00.000-05:00

UPDATE...

My next Trader Peak Performance Workshop is Sunday, April 9, 2006 from 10am - 12pm EST at 417 Fifth Avenue in NYC.
The topic will be

MASTERING THE SKILL OF MONEY MANAGEMENT: PSYCHOLOGICAL TRAPS AND EFFECTIVE SOLUTIONS

The cost for this workshop is $100 per person.
Payment will be processed via Pay Pal email.
Seating is limited so please email, The Head Coach, to reserve your spot today.

Keep your eye on the ball and your head in the game!

-- The Head Coach

FOREX Trading Expo on March 31, 2006 in Ft. Lauderdale

2006-03-15T14:23:00.001-05:00

Traders,
I will be presenting at the FOREX Trading Expo in Ft. Lauderdale on Friday, March 31, 2006.

10:30 - 11:30am in Room 304
The Fear of Missing Out: Under-Trading, Over Trading and Money Focus

1:00 - 1:45pm at the GFT (Global Forex Trading) Booth #301
Focusing on the Trade and Not the Money: Why You Do It and How to Stop It

Stop by and get your head in the game!

Dr. Doug
"The Head Coach"

FOCUSING ON THE TRADE AND NOT THE MONEY & OVERCOMING YOUR TRADING FEARS

2006-03-01T10:59:00.000-05:00

UPDATE...

My next Trader Peak Performance Workshop is Saturday, March 18, 2006 10am - 12pm EST at 417 Fifth Avenue in NYC. The topics will be

FOCUSING ON THE TRADE AND NOT THE MONEY & OVERCOMING YOUR TRADING FEARS

The cost for this workshop is $-- per person.
Payment will be processed via Pay Pal email.
Seating is limitted so please email me, The Head Coach, to reserve your spot today.

Keep your eye on the ball and your head in the game!

-- The Head Coach

PSYCHOLOGY OF SHORTING: THE SIX MENTAL BARRIERS AND THEIR SOLUTIONS

2006-02-23T07:31:00.000-05:00

By: Doug Hirschhorn, Ph.D. “The Head Coach"

Hello all,
Just wanted to let you know that I wrote a new article on the

Psychology of Shorting

(see p.77 in the March 2006 issue of Stocks, Futures and Options Magazine).

-- The Head Coach

Copyright 2006, Doug Hirschhorn All Rights Reserved

PEAK PERFORMANCE QUOTE

2006-02-15T09:45:00.000-05:00

By: Doug Hirschhorn, Ph.D. “The Head Coach"

"THE SMALLER THE DISTANCE IS BETWEEN WHO YOU ARE AND WHAT YOU DO - THE GREATER SUCCESS YOU ARE LIKELY TO ACHIEVE."

-- The Head Coach

Copyright 2006, Doug Hirschhorn All Rights Reserved

Staying Focused when you Make Good Decisions but your P & L Tells a Different Story

2006-02-06T14:32:00.000-05:00

By: Doug Hirschhorn, Ph.D. “The Head Coach”
TheHeadCoach@gmail.com

Are you good at what you do? That is the first question you need to ask yourself. If you are saying things like, “I used to be” or “not recently,” then I want you to clearly realize one thing:

In all my years of performance consulting, I have NEVER seen a person in any field (athletic or business) who had a negative attitude AND ended up being successful.

We Have Choices
Everything we do involves making choices.
As human beings, we have the freedom and ability to choose. Some things are easier to choose than others because they involve less effort, energy or resources; but easy choices are rarely the right choices. For example, if you want to get yourself into better physical shape then when your alarm goes off at 5:00am, you have a choice:

1) Get up and go to the gym
or
2) Hit the snooze button and stay in bed for another 45 minutes

Hmm, which is the “easier” choice? And which do think is the "right" choice? Exactly!

Now, as traders, you sometimes make good trades or trading decisions and end up with a bad P & L. Once again, you have a choice:

1) Lose your focus, get mad at the market, beat yourself up
or
2) Shift your attention to the PROCESS (things you CAN control) and re-establish your belief in your skills/talent/data points

Which is “easier” and which is the right choice?

What We CAN Control
Elements outside of our control, are just that – OUTSIDE of our control and therefore, there is little point in wasting emotional capital on them. Trust me, I know how “easy” it is to get caught up in the noise – especially when times get tough - but you have to understand that doing this serves no positive value to you or your trading.

If the referee makes a bad call (we saw a few of those during Super Bowl XL) you can be angry for a few seconds, but GET OVER IT and MOVE ON. Why? Because the ref’s call is OUT OF YOUR CONTROL.

Moving forward, I challenge you to start making the harder, right choices and use your emotional capital to focus on the PROCESS and things that are WITHIN YOUR CONTROL.

Keep your eye on the ball and your head in the game!

-- The Head Coach

Copyright 2006, Doug Hirschhorn All Rights Reserved

The C.H.A.M.P. Goal Setting Workshop on February 7, 2006 in NYC

2006-01-16T09:24:00.000-05:00

Thank you all for your feedback on my BLOG. I have plenty more to post so keep visiting.
I also wanted to let you know about an event I will be doing in New York City.

On February 7, 2006, I would like to invite you to join me (and a room full of professional traders) when I will be presenting my cutting edge C.H.A.M.P. Goal Setting Technique. The event is being hosted by Trader Monthly Magazine …so you know it will be a great party.

It will run from 6 – 8:30pm at OPAL(251 East 52nd Street)
* open bar, buffet and networking opportunities with top traders

Hope to see you there. Keep your eye on the ball and your head in the game!

-- The Head Coach

Getting Comfortable with Uncertainty

2006-01-13T17:39:00.000-05:00

By: Doug Hirschhorn, Ph.D. “The Head Coach”
TheHeadCoach@gmail.com

A trader who is comfortable with uncertainty has the capacity to stay relaxed in unclear situations and make high probability decisions with a strong degree of conviction.

As a trader, how many times have you asked yourself “Is this the right call?”
If you are like most other traders, the answer should be “nearly all the time.”
How about we break this down and think about it from a different angle.

New Perspective:
Let’s consider the possibility that it is NOT your job to make “The Right Call” but rather to make an intelligent, data-point-supported guestimate of what “The Right Call” could be and then monitor, adjust, and possibly liquidate that decision as it develops over time.

Viewing it this way takes the pressure off, doesn’t it? In fact, it may even get you more Comfortable with Making Decisions during Uncertainty.

My point is, like golf, trading is not a game of perfect. Successful traders just don’t waste their time trying to be “RIGHT;” instead they are focused on MAKING MONEY.

Top performers in any field practice their game, establish a plan and TRAIN themselves to execute when the widow of opportunity appears. So why would we think trading should be any different? In the end, winning is not about being right, it is about getting the job done.

Keep your eye on the ball and your head in the game!

-- The Head Coach

Copyright 2006, Doug Hirschhorn All Rights Reserved

Who, What, Why - Understanding Your Most Valuable Resource, YOU!

2006-01-10T12:31:00.000-05:00

By: Doug Hirschhorn, Ph.D. “The Head Coach”
TheHeadCoach@gmail.com

As we move into 2006, I think it is appropriate for us to reflect on who we are, what we do, and why we do it. To accomplish this, I am going to challenge you with some questions to help you uncover what makes you do the things you do.

Understand that the more you put into searching for the answers, the more you will gain from what you uncover. Please avoid taking the short-cut of saying “I am too busy to do this right now” as this brief exercise is one of those little things that can greatly improve the probability of achieving success as a trader. The best traders I have ever worked with have one remarkable thing in common and it is called Self Awareness. They all know exactly WHO they are, WHAT drives them and WHAT throws them off their game. With that said, take a few minutes to read, reflect, and write in your trading journal.

1) Why have you chosen to trade for a living? In other words, are you passionate about what you do and, if so, what is it about trading that motivates you to be the best? (if you cannot think of anything, then you may have stumbled on more of an answer than you realize!)

2) What are your top strengths/weaknesses as a trader? What were your top strengths/weaknesses as an athlete?

3) Can you adjust your trading style to magnify your strengths and minimize your weaknesses?

4) What distracts you from being at your best?

5) What gets you focused?

6) What makes you nervous?

7) What gives you confidence?

8) Who do you view as your mentor?

9) Who are you a mentor to? (the best way to learn is to teach)

10) Are you willing to do what it takes to reach your full potential as a trader?

“A person who does not take the time to ask themselves the hard questions unknowingly gives up the opportunity to achieve their potential.”

Trust me, your efforts will not be wasted as you will be uncovering your most valuable, yet underutilized resource – YOU!

Keep your eye on the ball and your head in the game!

-- The Head Coach

Copyright 2006, Doug Hirschhorn All Rights Reserved

Thinking Backwards to Re-Gain Objectivity

2006-01-06T10:53:00.000-05:00

By: Doug Hirschhorn, Ph.D. “The Head Coach”
TheHeadCoach@gmail.com

One of the most challenging skills in a trader’s game is Maintaining Objectivity. While there are a variety of factors which contribute to you losing objectivity in a given situation, there is a clear and defined path you can follow to re-gaining it. In simple terms, I like to call it Thinking Backwards.

The Issue
More times than not, losing objectivity occurs when you micro-manage a situation. It may be in the form of watching the tape or over-thinking a position; but in essence, you are losing sight of the MACRO picture or what I will refer to as your reason WHY.

Your Reason WHY
Your reason WHY is what you should be asking yourself on a regular basis. Questions like:

Why am I in this trade?

Why do I like/not like this position?

Questions like these will help you to maintain objectivity in your trades as new data points, emotions or your own destructive trading habits attempt to throw you off course.

Red Flag
The more difficult it is for you to answer Your Reason WHY, the more likely it is you have lost objectivity in the situation.

The Solution – Thinking Backwards
1)Acknowledge that you have lost objectivity
Now that you are aware of the problem, you can begin to deal with it.

2)Remove yourself from the day-to-day noise and write down what your original thesis was
Cleaning off your mirrors will tell you what direction you are moving in. As Zig Ziglar once said, "You can't hit a target you don't see."

3)Begin to Think Backwards by creating three columns with the following headings (Support, Do Not Support, Undecided)
This will force you to Objectively lay out and evaluate the situation.

4)Talk to yourself:

Based on the data points I wrote down in each column, if I did not have a position on, what would I do?

Asking yourself this question forces you re-evaluate the situation from an unbiased perspective.

5)Compare your response with your original position/thesis to create a WIN-WIN
WIN#1 = if there is a discrepancy, you can be proactive in creating a new game plan which may involved taking some/all of the risk off or even reversing the position.
WIN#2 = if there is no discrepancy, you have instilled deeper conviction in your original thesis and can then hold or add to the position.

In closing, losing your way is not nearly as important as how long it takes you to get back on course. The skill of Thinking Backwards can serve as your map to Re-Gaining Objectivity.

Keep your eye on the ball and your head in the game!

-- The Head Coach

Copyright 2006, Doug Hirschhorn All Rights Reserved

5 Trading Pitfalls and how to Solve Them

2005-12-23T13:45:00.000-05:00

By: Doug Hirschhorn, Ph.D. “The Head Coach”
TheHeadCoach@gmail.com

As a trading coach to some of the top traders in the country, I have observed that Losing money doing the right thing does not destroy a traders’ mental focus. It is when they lose money doing the wrong thing…That is what truly eats at their soul and messes with their head.

With that said, the following are 5 common pitfalls I have seen traders experience and I have listed 5 practical solutions you can quickly implement to overcome these assassins to your performance.

Pitfalls
1. Focusing on the P & L

2. Losing objectivity while in a trade

3. Becoming emotional about a trade

4. Lacking confidence: exiting early, failing to put a trade on, not sizing up

5. Difficulty adapting to a changing market

Solutions
1. Quantify success base on the caliber of the trade (i.e. high quality entries/exits).

2. Continuously ask yourself, “is my original reason WHY I entered this trade still there?”

3. While you are in a trade, ask yourself, if I had no position on right now, what would I do? Buy? Sell Short? Do nothing? Then re-evaluate your trade size and direction.

4. Confidence should always come from within. Step#1: Write bullet list of data points proving WHY you are a skilled trader. Step #2: Prime yourself each morning by reading it over to yourself. Could be the most valuable 30 seconds you spend each day.

5. Flip your perspective by keeping track of what is not working (by default this tells you what IS working).

Keep your eye on the ball and your head in the game!

-- The Head Coach

Setting Goals to Achieve Your Potential in 2006

2005-12-22T16:05:00.000-05:00

By: Doug Hirschhorn, Ph.D. “The Head Coach”
TheHeadCoach@gmail.com

Take a minute to think back about your accomplishments and progress throughout the past year. Did you achieve ALL of your goals? Did you really push yourself to set high but realistic goal standards? Did you surpass your OWN expectations of performance? Can you look in the mirror and say with conviction that you were truly A+?

This is not about comparing yourself to others, but looking deep inside and making it your mission to be better than you were yesterday. That is why I do not believe one ever really truly reaches their “full potential.” Becoming your best is and should be an ongoing journey.

The Problem
Through my observations and conversations over the past five years as a coach, I have noticed that 99% of people do a poor job of establishing goals and when they do, they fail to reflect on them on a regular basis. From an achievement perspective, if you think about, it does not seem to make much sense. After all, if setting goals is a useful exercise, then maybe we should be doing it consistently and leverage it to take our game to the next level. My purpose in this post is to challenge you to begin (if you have not already) your journey to achieving A+ in 2006.

The Solution
So what does it take to be A+?
While there are a variety of factors, goal setting is certainly at the top of the list of ingredients. Interestingly, it is something that anyone can do but remarkably few people take the time or make the effort to do it properly. Rather than spend time exploring why this is the case, here are some things you can do to increase the probability of successfully achieving your goals in 2006 and move towards A+.

* Carefully assess what your strengths and weaknesses are as a person and a trader

* Reflect on what you have accomplished in the past, what typically gets in your way, and what you have done to deal with these barriers when they appeared

* Provide yourself with a clear-cut structure and game plan

* Solicit regular feedback, from those you work with or respect, on what you are doing right and wrong

* Regularly “check in” with yourself to measure accuracy, clarity, and progress

* And most importantly, gain self-awareness and accountability by writing everything down in your journal

Remember, setting goals is about YOU. It is about helping you stay on target as you move towards reaching your potential. With this said, learn from 2005 and be more proactive in your goal-setting process as you continue to take our game to the next level in 2006.

Until next time, keep your eye on the ball and your head in the game!

-- The Head Coach

Daring to be Great: Trading Lessons from the "Splendid Splinter"

2005-12-21T11:18:00.000-05:00

By: Doug Hirschhorn, Ph.D. “The Head Coach”
TheHeadCoach@gmail.com

Inevitably as the year winds down, traders are caught in the decision of whether they should “take it easy” or step it up to “finish with a bang.” Unfortunately, I don’t have the perfect answer, but thanks to the legendary baseball player Ted Williams aka “The Splendid Splinter,” I do have some insights on how he thought about these things and as a result, how you, as a trader can think about them.

I continue to believe that "taking yourself out of the game" is not the right answer unless under specific circumstances where the mental/emotional damage caused by losing money outweighs the feelings of success you would experience by continuing to trade.

With that said, you have to ask yourself, "If I only made the highest quality of trades - how will I feel about the outcome if I make/lose money?"

In general, traders do not mind losing money (they understand it is a necessary part of the game) - what they do mind is losing money doing the "wrong" things such as being sloppy, undisciplined, etc.

You really have to know yourself and ask yourself how you are going to feel about the situation two weeks down the road, if you made great trades but lost money?....as that is a possibility.

Lesson from the “Splendid Splinter”
In 1941, Ted Williams was batting .39955 (which rounded up to .400) with 2 games left in the season. His manager, Joe Cronin, suggested Ted sit out the last two games (a double header against Philly) so he could end the season batting .400, which by the way was a remarkable feat, as all baseball minded people know.

Ted's response was "I don’t want to hit .400 that way." He refused to be benched and went 6 for 8 in the last two games, finishing his season with a .406 batting average.

The lesson for traders and the real question is....if Ted had gone 0 for 8 in the last two games and ended the season UNDER .400, would he have regretted his decision?

I think the answer is "No."
Ted had a passion for the game, strong internal confidence and was willing to accept whatever outcome may have resulted from his decision. Fact is he wanted to hit .400 but he did not want to achieve it by hiding.

Now, only you know if playing in the last two games of season is the right decision for you. Ted made the right choice for HIM but in a game as difficult as trading; sometimes sitting on the bench is the exact right thing to do. The bat is in your hands and the choice is yours to make…just be comfortable with what the consequences may be before you make that decision.

Until next time, keep your eye on the ball and your head in the game!

-- The Head Coach